ST. LOUIS — Inflation and higher interest rates are making Americans feel broke. Research from the Lending Club shows that nearly 60% of credit card holders in the U.S. live paycheck to paycheck, and many people say they have no money left after paying their monthly bills.
Lynette Khalfani-Cox is a former journalist-turned-money expert who wants to share five ways we might be able to save $10,000 a year or more. Cox is a New York Times bestselling author who wrote a new book called "Bounce Back: The Ultimate Guide to Financial Resilience," which is all about resetting finances.
Khalfani-Cox said there are ways to swap out more expensive things for cheaper alternatives. The shift is often painless and realistic because it's not too drastic.
1. Prescriptions
According to the Centers for Disease Control and Prevention, 60% of adults in America take prescriptions, spending about $100 a month. Khalfani-Cox said you can slash this cost by 70% by switching from brand name to generics.
"There's no sacrifice to your overall well-being because by federal law even generic medicines have to have the same active ingredients as brand name prescriptions," Khalfani-Cox said. "So you'll do yourself a favor, and you'll save a lot of money on that front."
A St. Louis-based nonprofit pharmacy called Rx Outreach uses technology to cut costs and utilizes donations.
2. Groceries
You may have heard this before, but avoiding packaged and processed foods at the grocery store could save you big. First of all, they cost you about 25% more than buying real, whole foods. Swapping out premade meals and packaged snacks could cost a family of four around $1,500 a year, according to The Money Coach.
3. Phone service
Many of us buy new mobile phones every two or three years, but Khalfani-Cox recommends skipping the purchase of a new phone altogether, which could cost $1,000 over time. She said to be creative by swapping out a regular phone service for a prepaid phone. For example, Straight Talk Wireless offers affordable prepaid phones with no contracts and lines as low as $25. Khalfani-Cox said if you choose the company's family plan for the best value, you could save $960 a year.
"It's one of those switches that's frankly really easy for people to make but can be a really big way to put some cash back into your budget," Khalfani-Cox said.
4. Credit cards
Interest rates for credit cards now hover above 20%. If you're paying that much in interest, chances are your debt will linger for longer. Khalfani-Cox said to try switching your high-interest rate for one with a promotional 0% rate. You could save $2,000 this year on a $10,000 debt.
5. Child care
It's no secret that child care is a major expense. Daycare costs well over $10,000 and up to $35,000 a year. Nannies can run $20,000 to $70,000 a year depending on where you live and what kind of service you get.
Khalfani-Cox said to consider grabbing a nanny to share with another family. That's when two or more families share the same nanny and split the cost. This move could put thousands of dollars back into your budget each year. Facebook and neighborhood groups are good places to start.
"The tiny effort to make these easy switches is worth it for the peace of mind that comes when people use the ‘switch and save’ strategy to stop living paycheck to paycheck,” Khalfani-Cox said.
We'd love to hear about your money-saving swaps. Email mli@ksdk.com to share yours.
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